23/08/13 -- Soycomplex: Beans and meal closed sharply higher on a renewed forecast for hot and generally dry weather to dominate the US Midwest in the week ahead. "Midwest temperatures are trending hotter. Highs in the mid 90s F are predicted Monday in the Upper Midwest, when a ridge of high pressure builds up over the central United States. Minneapolis would reach 97 F Sunday continuing with mid 90s F the rest of the week. Mid 90s F are also in the new forecast for Nebraska, Iowa and Illinois," said Martell Crop Projections. The trade seems to believe that the US soybean crop is more at threat from these conditions than the corn crop is. The final results from the Pro Farmer crop tour would appear to go along with this, with pod counts in the top three US soybean producing states all down versus the 3-year average. After that, three of the next top four highest producing soybean states are only showing modest gains versus the 3-year average, with only Ohio showing anything like a decent gain where pod counts are up 10% versus the 3-year average. When we consider that this average also includes last year's poor result then it this year's late planted, late maturing crop faces an uphill struggle to attain anything like a "normal" yield. The market is particularly concerned about that given that the USDA slashed potential 2013/14 US soybean ending stocks from 295 million bushels to 220 million earlier this month. Any further cuts to production would tighten this carryout further, unless the USDA reduce their projected 2013/14 exports that is, but these are already running well ahead or normal for this time of year - a fraction under 50% of the USDA's target for a season that hasn't even started yet! The normal volume forward sold at this point in time would be 31.5%. A decline of one bushel/acre from the USDA's current yield estimate of 42.6 bu/acre would take 2013/14 ending stocks down to 143 million bushels without any adjustments to demand, that isn't much higher than the 125 million that the USDA insist will be left over at the end of 2012/13, a number tight enough to see prices peak above USD16/bu only last month. Pro Farmer came up with a final US soybean yield in the range of 41.0-42.6 bu/acre and estimated the harvested area at 800,000 acres below the USDA's August number (remember the news that came out after the Aug USDA report that 1.6 million acres of intended US soybean area never got planted this year?), with production at 3.158 billion bushels versus the USDA's 3.255 billion. The latest Commitment of Traders report shows managed money more than doubling their net soybean long in the week through to Tuesday night to just shy of 100,000 contracts. Sep 13 Soybeans closed at USD13.65 1/4, up 43 1/4 cents; Nov 13 Soybeans closed at USD13.28, up 41 1/4 cents; Sep 13 Soybean Meal closed at USD433.20, up USD19.90; Sep 13 Soybean Oil closed at 42.64, up 21 points. For the week front month beans gained 82 cents and meal USD24.40, whilst oil was down 17 points versus last Friday.

Corn: Corn got some support from the revised US weather outlook, although the trade seem to think that this is more of an issue for beans. "Prolonged cool weather has slowed corn development in Iowa (the leading US corn state) and across the Upper Midwest. Cedar Rapids, Iowa, was 5.4 F below normal the past 30 days, setting back corn development. Only 24% of Iowa corn had reached the 'dough' stage by August 18th, the second slowest progress in 28 years. Delayed planting dates and cool summer temperatures are responsible for the slow development. Producers are worried about potential freeze damage in the fall. The forecast is hotter with intense heat predicted beginning Sunday and continuing through next week. This is a mixed blessing spurring corn development, but also worsening moisture stress on dry farms," said Martell Crop Projections. The Pro Farmer crop tour found much better potential corn yields this year than last, with Iowa coming in 25% up on 2012 and 9% above the 3-year average. Indeed, all the states in the survey had yields up on last year and the 3-year average, with SD showing the biggest improvement, up 118% versus 2012 and 35% above the 3-year average. The bottom line was surprisingly low then, showing an estimated US corn yield of 154.1 bu/acre, which is 0.3 bu/acre below than the USDA's August forecast. Final production was estimated at 13.46 billion bushels versus 13.763 billion from the USDA. Part of the reason that the production number was so far below the USDA was the Pro Farmer decision to peg US harvested acres at 1.8 million below the USDA's estimate - again this could be down the 3.4 million acres of "prevent plant" US corn, including 613,257 acres in the top producing state of Iowa, that was revealed subsequently be the USDA's Farm Service Administration. I guess that now we go back to trading the weather. Certainly cool temperatures in July and August don't seem detrimental to corn yields. Historical data shows that the record yields achieved in 2009 followed a July that was the coolest on records going back to 1960 along with the 7th coolest August. The 04/05 crop year had the 6th coolest July and the 2nd coolest August which resulted in a yield 13.3% above trend and is the second highest on record. In other news, the Buenos Aires Grains Exchange said that the Argentine corn harvest is very nearly complete at 99.3% done. They estimated Argentine production at only 24.8 MMT versus the Argentine Ag Ministry's estimate of 32.1 MMT. The weekly Commitment of Traders report shows managed money decreasing their net short position in corn by 31,443 contracts to 91,778 contracts for the week through to Tuesday night. Sep 13 Corn closed at USD4.95 1/2, up 8 cents; Dec 13 Corn closed at USD4.70, up 5 1/2 cents. For the week that puts Sep 13 corn up 18 3/4 cents, with Dec 13 up 6 1/2 cents.

Wheat: Wheat was mixed, up a little in Chicago and Kansas and down in Minneapolis. The latter continues to give up some of its premium over the other two following the Stats Canada news from earlier in the week that Canadian spring wheat production will rise 17% this year. Dec 13 MGEX wheat has subsequently set a new contract low on the back of this news and spring wheat now trades at levels not seen since May 2012. Fresh news is generally lacking for wheat and it remains a follower of corn. Saudi Arabia issued an tender to purchase 660 TMT of hard wheat over the weekend, with the results expected on Monday. German wheat should be in with a good shout of winning at least some of that business. Bangladesh are also tendering for 50 TMT of optional origin wheat for Sep/Oct shipment. Ukraine could be the favourites for that order. South Korea are said to be buying corn instead of feed wheat due to the recent decline in corn prices. China continues to be absent from the market and US wheat doesn’t price up into the Middle East and North Africa. Russia said that it expects to export 15 MMT of wheat in 2013/14, an increase of 36% versus last season. Their wheat harvest is now past the halfway mark, producing 36.8 MMT so far. FranceAgriMer said that their wheat and barley harvest is just about done. There's some talk of wheat on South Australia's upper Eyre Peninsula being hit by frost. Brazil's wheat crop certainly does seem to have been badly affected by frost, and they have been active buyers of US wheat of late. Argentina are sold out until new crop comes along at the end of the year. The Buenos Aires Grains Exchange said that winter wheat planting in Argentina is now complete. They have the planted area at 3.9 million hectares, similar to the Ag Ministry's forecast. They said that winter barley planting is also complete, with the area at 1.27 million ha, down 19.1% from a year ago. The latest Commitment of Traders report shows managed money decreasing their net short position in Chicago wheat by 1,055 contracts to 42,941 contracts. Further short-covering on any subsequent dips could be a feature going forward. Chartists say that there is solid resistance in Sep 13 Chicago wheat at around USD6.63 and that USD6.19 is the next downside target. Strong resistance for Chicago December wheat is holding at USD6.57 1/2. Sep 13 CBOT Wheat closed at USD6.34 1/2, up 4 cents; Sep 13 KCBT Wheat closed at USD6.95 1/2, up 1 1/4 cents; Sep 13 MGEX Wheat closed at USD7.16 1/4, down 3 cents. For the week that puts front month Chicago wheat 3 1/2 cents higher, with Kansas 2 3/4 cents weaker and Minneapolis down 21 cents.

23/08/13 -- EU grains were lower for much of the day, but edged higher later in the session after afternoon US weather forecasts turned hot and dry for next week. That sent soybean prices soaring, taking CBOT corn and wheat with it, and EU grains tagged along for the ride.

At the close Nov 13 London wheat was GBP1.00/tonne firmer at GBP156.75/tonne and with Jan 14 also up GBP1.00/tonne at GBP159.00/tonne. Nov 13 Paris wheat finished the day EUR0.25/tonne firmer at EUR185.50/tonne.

Front month Nov 13 London wheat was up GBP4.15/tonne on the week, but GBP6.10/tonne lower since the beginning of the month. Nov 13 Paris wheat was up EUR1.75/tonne on the week but down EUR4.25/tonne since the turn of the month.

Paris wheat seems to have found its level, holding up above the EUR180/tonne mark, and just above the EUR179-180/tonne lows of late 2011. Paris corn has already taken out the 2011 lows, but has rebounded slightly this week from levels not seen since the summer of 2010 a couple of weeks ago.

As the wheat harvest draws to a close in many parts of Europe, attention is now turning to corn. FranceAgriMer today said that the French wheat harvest advanced to 98% compete, with the spring barley crop 99% done. They have 95% of the French corn crop at the silking stage, up from 88% a week ago and versus 95% this time last year. They cut the proportion of the corn crop rated good/excellent by one point to 54% (and well behind the 74% rated G/E a year ago) and increased poor/very poor by a similar amount to 17% (versus only 3% this time last year).

Arvalis estimated the French corn crop at 14.8 MMT versus 15.6 MMT in 2012, that's a fair bit lower than Strategie Grains' estimate of 16.0 MMT and the French Farm Ministry's 15.6 MMT. The German farmers association, DBV, yesterday estimated corn output there at 4.49 MMT, down 1 MMT versus last year. Harvesting of Spain's corn crop should begin in 2-3 weeks. With a planted area up 10% and good rains they should beat last year's harvest total of 4.4 MMT.

Further east in countries like Hungary and Romania corn production is seen sharply higher this year, which should more than compensate for decreases in output from France and Germany to give the EU-28 a crop around 10-12% higher than last year.

Ukraine meanwhile is also expecting a record corn crop of 26-29 MMT in 2013.

European wheat is priced to sell. EU soft wheat exports are currently running at 3.2 MMT, up more than 120% on this time a year ago. The leading French export hub of Rouen shipped 161 TMT of soft wheat this week, the second week of robust exports in a row.

Talk of quality problems with Russian wheat continue, Ukraine has plenty of wheat, the logistics of getting it to market and the timely and efficient loading of vessels is their problem.

Russia's 2013 grain harvest now stands at 55.2 MMT off 47.3% of the planned area. Wheat accounts for 36.8 MMT of that, off 50.1% of the plan, with average yields still holding up surprisingly well at 2.93 MT/ha, a rise of 41.5% on this time a year ago. They've also harvested 10.5 MMT or barley off 54.1% of the plan.

Winter grain plantings in Russia have almost reached the 1 million hectare mark of the planned 16.4 million ha. The winter wheat area is expected to be around 13 million ha.

The Russian Ministry are, at least for now, standing by their forecast for grain production of 90 MMT this year. The Russian Meteorological Agency today cuts its grain harvest forecast to 88-90 MMT.

23/08/13 -- The latest UK harvest update on the Farmers' Weekly website provided me with a nice lunchtime chuckle as looks like it's being presented by Graham Norton's more effeminate baby brother who's just transferred across to FWi from his previous job with CBeebies:

22/08/13 -- Soycomplex: Beans finished lower on overnight rains, although opinion is divided on how much good they might do. "Strong thunderstorms erupted in Nebraska and northern Iowa this morning. Growing conditions have been extremely dry the past 3-4 weeks. While heavy rain is welcome, it is arriving too late in the growing season for maximum benefits," said Martell Crop Projections. This system also affects parts of southern MN, stretching east with lighter showers for northern IL and IN. Reuters, reporting from an international grains conference in Australia, said some analysts there forecast that the US soybean crop could be 92.5 MMT, or even above 95 MMT, well ahead of the USDA's current forecast of 88.6 MMT. Others aren't so optimistic, MDA CropCast cut their estimate by 650 TMT to 87.48 MMT citing dryness in western areas. Even so that would still be a 15% increase on production last year. Day 3 of the Pro Farmer crop tour found an east central Iowa average soybean pod count of only 661 pods per 3 foot square plot versus 1,079 pods a year ago and 1,189 pods for the 3 year average. In southern Minnesota they found an average soybean pod count of 975 pods versus 900-920 pods a year ago and 1,050-1,100 pods for the 3 year average. In Illinois they found an average bean pod count of 1,115.97 pods versus 944.05 pods a year ago and the 3 year average of 1,149.47 pods. Weekly export sales for soybeans came in at 20,900 MT for old crop and 926,000 MT for new crop, which were primarily for China (681,000 MT) and unknown destinations (159,500 MT). That fell below trade expectations of 1.3-1.7 MMT. Brazil will plant 3-5% more soybeans for the 2013/14 season, say Rabobank. Although production costs are rising, beans offer better potential returns than corn. Brazilian farmers will also benefit from the value of the real which has fallen by around 20% versus the US dollar since May. China sold 187 TMT of the 500 TMT of soybeans, or 37.3%, that was offered at today’s government auction. Sep 13 Soybeans closed at USD13.22, down 11 cents; Nov 13 Soybeans closed at USD12.86 3/4, down 17 1/4 cents; Sep 13 Soybean Meal closed at USD413.30, down USD8.20; Sep 13 Soybean Oil closed at 42.43, down 39 points.

Corn: Better than expected overnight rains saw corn move lower, sharply lower in the case of new crop. Weekly export sales of 58,200 MT of new crop and 434,400 MT for 2013/14 fell well below trade expectations of 700 TMT to 1 MMT. Yesterday's weekly ethanol usage data was uninspiring also, suggesting that the USDA is overstating ethanol demand in 2012/13 by as much as 20-25 million bushels. The Pro Farmer crop tour is generally finding decent yield potential for US corn this year. In east central Iowa they came up with average corn yield at 170 bu/acre versus 140 bu/acre a year ago and the 3 year average of 161 bu/acre. In southern Minnesota they found an average corn yield of 177.3 bu/acre versus 146-158 bu/acre a year ago and around 167-174 bu/acre for the 3 year average. In Illinois they found an average corn yield at 170.48 bu/acre versus 121.60 bu/acre a year ago and a 3 year average of 148.04 bu/acre. In western Iowa they found an average corn yield at 168.6 bu/acre versus the 3 year average of 160.74 bu/acre. Their final estimates will be released tomorrow. The US Grains Council estimated China’s 2013/14 corn imports at 10.0 MMT, versus 3 MMT in 2012/13 and the USDA's current estimate of 7 MMT. They said that US corn undercuts domestic Chinese supplies by USD145/tonne! That would make China the second largest corn buyer in the world after Japan. MDA CropCast cut their forecast for US corn production this year by 1 MMT to 351.4 MMT, still a hefty 35% increase on output in 2012. We are still in the vagaries of a weather market. "The new 5-day forecast calls for below-average rainfall in the Midwest. A ridge of high pressure in the heartland would block showers from the central United States. Less than one-quarter inch of moisture is expected. Modest showers 0.25 - 0.50 inch would occur in northern Illinois, northern Indiana and Ohio. The normal Midwest 5-day rainfall is 0.66 inch in late August. The forecast is hotter in the North-Central states this weekend, where the jet stream builds up a stable ridge of high pressure. Maximum temperatures would be 6-10 F above normal Sunday-Wednesday in Iowa, Nebraska, South Dakota, North Dakota, Wisconsin and northern Illinois. Less extreme heat is predicted in the eastern Midwest, 3-6 F above normal," said Martell Crop Projections. Sep 13 Corn closed at USD4.87 1/2, down 10 1/2 cents; Dec 13 Corn closed at USD4.64 1/2, down 18 3/4 cents.

Wheat: Wheat followed corn easier. Weekly export sales of 494,000 MT were so-so, although in line with expectations of 450-550 TMT. Brazil was the largest buyer again taking 188,800 MT, with China also in there for 52,300 MT. The early strong pace of EU wheat exports in 2013/14 is highlighted by the fact that Brussels have now issued 3.2 MMT of soft wheat export licences this season versus only 1.44 MMT this time a year ago. French and Black Sea wheat is very competitive into North Africa and the Middle East compared to US origin grain. MDA CropCast cut their forecast for Russia's wheat production this year by 600 TMT to 52.5 MMT, that's still a 39% increase on last year though. They raised production in Morocco by 300 TMT from last week to 6.7 MMT an 81% increase on 2012. They cut Australia's barley crop by 200 TMT to 7.2 MMT versus 6.8 MMT in 2012/13. Jordan bought 100 TMT of optional origin feed barley for April shipment. Japan bought 153 TMT of US/Canadian milling wheat for Sept-Nov shipment in a routine tender. The Argentine Ag Ministry estimated Argentina’s 2013/14 wheat area at 3.9 million ha versus a previous estimate of 4.0 million. The German Farmers Association, DBV, estimated German’s 2013 winter wheat crop at 23.9 MMT versus the 2012 crop of 22.38 MMT. They said that German’s winter barley harvest is complete and they harvested 8.2 MMT versus 7.0 MMT a year ago. Various analysts are lining up to point out that Ukraine will suffer logistical problems with its potentially record 2013 grain harvest and its attempts to export 34-39 MMT of grains, oilseeds and by-products in 2013/14. They will remain aggressive sellers throughout much of the new campaign, but may start letting some buyers down later in the season, especially once winter starts to bite. Yesterday's Stats Canada spring wheat production estimate of 21.83 MMT was up almost 17% versus 18.72 MMT a year ago. This sent bearish vibes into the Minneapolis wheat market yesterday and today, and the premium the market held against the KCBT and Chicago markets eroded as a result. Minneapolis wheat was thus the weakest leg of the three wheat exchanges for the second day running tonight. Sep 13 CBOT Wheat closed at USD6.30 1/2, down 8 1/4 cents; Sep 13 KCBT Wheat closed at USD6.94 1/4, down 5 1/4 cents; Sep 13 MGEX Wheat closed at USD7.19 1/4, down 9 1/2 cents.

22/08/13 -- EU grains closed mixed. US markets are trying to rally on various potential weather scares. Short-term dryness and heat, combined with talk of early frost worries in the Midwest are enough to keep the market on it's toes for the time being. With funds short on corn and wheat, and only sitting on a very small soybean long, the market remains vulnerable to a corrective bounce on issues such as these.

Germany's farmers association, DBV, estimated the winter wheat crop there at 23.9 MMT, up 6.8% versus 22.38 MMT a year ago. They have the winter OSR crop at 5.6 MMT, an increase of 16.7% from 12 months ago, with the winter barley harvest complete at 8.2 MMT, up 17.1% versus 7.0 MMT a year ago.

ADAS said that 25% of the UK combinable crop area is now harvested compared to the five-year average of 50%. "The slow rate of progress this season reflects the slow maturation of crops rather than weather impacts on harvest. In the South, progress is about 2-3 weeks later than normal, although in Scotland and north England it is closer to average," they said.

"The wheat harvest is 15% complete with yields currently close to average at 7.6-7.8 MT/ha. Milling samples are meeting specification. The winter barley harvest is drawing to a close with 90% UK area complete. Yields are above the five-year average at 6.5-6.8 MT/ha and quality is good. The spring barley harvest has now started in Scotland, as well as progress being made in southern England – 20% of UK area harvested to date," they added.

Winter oilseed rape is 50% cut, with yields better than expected. The current estimate is only slightly below the 5 year average at 3.3-3.5 MT/ha, they said.

Separately, ODA said that the UK wheat harvest was about 28% done, although they only place yields at 7.26 MT/ha.

Russia's grain harvest is approaching the halfway point at 46% compete, producing a crop of 54.2 MMT so far. Wheat accounts for 36.5 MMT of that off 50% of the planned area, with average yields of 2.93 MT/ha, up 40%. They've also harvested 10.2 MMT of barley and 2.5 MMT of corn to date.

Oil World estimated the EU-28 OSR crop at 20.8 MMT, up from a previous forecast of 20.5 MMT and a 7.2% increase on last year.

Brussels issued 579 TMT of soft wheat export licences in the past week, bringing the 2013/14 marketing year to date total to a very respectable 3.2 MMT so far. They also issued licences to export 338 TMT of barley, taking the year to date total to 1.98 MMT.

French grade 1 milling wheat is offered in the market at USD251/tonne FOB Rouen, the equivalent of around GBP161/tonne. New crop corn FOB Bordeaux is USD223.50/tonne, circa GBP143/tonne.

Agritel said that Ukraine face a major logistical challenge in trying to export a record 30 MMT of grains and 4 MMT of oilseeds this year. APK Inform said that Ukraine has the potential to ship 39 MMT of grains, oilseeds and by-products this year - the equivalent of 3.25 MMT/month, yet they've only managed to ship 3.5 MMT between Jul 1 and Aug 20.

22/08/13 -- Waiting and hoping that soymeal prices will fall below GBP300/tonne? They're already there, in a manner of speaking.

NWF Ultra Pro-R, rapeseed meal which has been treated to reduce the degradability of the protein in the rumen, can be used as a cost-effective source of the quality protein to partially replace soymeal in the feed ration.

NWF Ultra Pro-R has a higher bypass protein content than soymeal but with a much lower price, providing optimum performance and value in the balanced diet. A 34% crude protein product but with 75% available as DUP.

Available in bulk and tote bags ex the North West, call or email me for the latest prices and/or a specsheet.

22/08/13 -- Following on from yesterday's nice winner, Bogart at 7/1, I'm playing with the bookies money today.

Unfortunately there are no sprint handicaps at York, but the opener is a trappy looking 20 runner affair over 6 furlongs.

I'm going to have a little tickle on Ventura Mist, currently available at 12/1, and drawn 19 of the 20.

She stayed on well over 6 furlongs at Newmarket last time out, and the fifth in that race subsequently went on to win a listed race next time out, whilst the winner (Ventura Mist was beaten 3/4 of a length) went on to be fourth in a Group 2 race on her next run.

In other news, I'm saddened to hear that the reported death of REM lead singer Michael Stipe has been revealed as an internet hoax: Everybody hurts

The reason I'm sad about it is that it prevents me from telling you that only two people knew about his death. That's me an' the coroner.

22/08/13 -- Rapemeal prices on the continent are sharply higher for a second day in a row, despite Oil World raising their forecast for EU-28 rapeseed production from 20.5 MMT to 20.8 MMT - the second highest on record.

21/08/13 -- Soycomplex: The market finished with decent gains, led by the front end, although deferred positions closed well off the intra-day highs. A Stats Canada 2013 rapeseed production forecast of 14.7 MMT, whist up 11.5% on last year, was well below the 15.5 MMT that the trade was expecting. A drier and warmer outlook to the latest US weather forecasts added support. The US Soybean Export Council estimated the 2013/14 US soybean crop at above 90.0 MMT (3.307 billion bushels) versus the current USDA estimate of 88.6 MMT (3.255 billion bushels). They estimated US soybean yields at 44.0 bu/acre or higher versus the USDA's 42.6 bu/acre. Chinese customs data puts their soybean imports in July at 7.197 MMT up 22.68% from a year ago. Of that total 5.437 MMT came from Brazil (up 43% from a year ago), 1.258 MMT from Argentina (up 13.64%) and 500 TMT from Uruguay (up 71%). China's Jan/Jul soybean imports were 34.687 MMT down 0.66% from a year ago. Of that 18.788 MMT came from Brazil (up 9.97% from a year ago), 2.175 MMT from Argentina (down 8.12%) and 12.523 MMT from the US (down 16.48%). China are to auction another 500 TMT of beans from state reserves tomorrow. Day two of the Pro Farmer crop tour moved on to NE and IN. In Nebraska they found a soybean pod count of 1,138.9 pods per 3 foot square plot versus 894.4 pods a year ago, but slightly below the 3 year average of 1,162.4 pods. In Indiana they came up with a soybean pod count of 1,185.14 pods versus 1,033.24 pods a year ago and the 3 year average of 1,136.48 pods. Trade estimates for tomorrow's weekly export sales report for soybeans are 1.3-1.7 MMT. Sep 13 Soybeans closed at USD13.33, up 23 3/4 cents; Nov Soybeans closed at USD13.04, up 13 1/2 cents; Sep 13 Soybean Meal closed at USD421.50, up USD7.70; Sep 13 Soybean Oil closed at 42.82, down 6 points.

Corn: The corn market closed higher, also led by the front end, on weather concerns. "Drought is shifting east, now affecting Indiana and Ohio more strongly while dry conditions have eased in Nebraska and western Iowa," said Martell Crop Projections. "Iowa corn and soybeans have received light-moderate rains in August. Conditions have remained rather steady. However, prospects are bad with only 47-48% corn and soybeans making the good-excellent grade. Crop conditions have deteriorated sharply in Illinois, the second biggest corn and soybean state. Hardly any rain has occurred the past 3-4 weeks," they add. The Pro Farmer crop tour estimated the average corn yield in Nebraska at 154.9 bu/acre versus 131.8 bu/acre a year ago and the 3 year average of 147.9 bu/acre. In Indiana they went for an average corn yield of 167.36 bu/acre versus 113.25 bu/acre a year ago and a 3 year average of 141.14 bu/acre. Tomorrow is the last day of the tour and scouts will be in Iowa and Illinois. Chinese customs data puts their Jan/Jul corn imports at 1.595 MMT, down 48.99% from a year ago. Malaysia bought 45 TMT of Ukrainian corn for Oct shipment at a substantial discount to US origin material. Stats Canada forecast the corn crop there this year at 13.075 MMT, up slightly on 12.954 MMT last year. The Energy Dept pegged US ethanol production down 13,000 barrels/day from last week to 844,000 bpd. Trade estimates for tomorrow's weekly export sales report are 700 TMT to 1 MMT. Last week’s sales were 836,100 MT of new crop, while old crop sales were a negative 59,100 MT. Sep 13 Corn closed at USD4.98, up 14 1/4 cents; Dec 13 Corn closed at USD4.83 1/4, up 7 3/4 cents.

Wheat: Wheat closed mixed, lower in Minneapolis and a bit higher in Chicago and Kansas. Stats Canada came out with an all wheat production estimate of 30.6 MMT, a 22 year high. China’s Ministry of Agriculture said China has harvested 70% of their grain crop and expects 2013 production to hit another record high for the 10th straight year, despite drought. But then again what else would you expect them to say? Chinese customs data shows that they imported 308,744 MT of wheat in July, up 22.73% from a year ago. Jan/Jul wheat imports however are 1.71 MMT, down 30.07% from a year ago. Overnight the Chinese bought one cargo (55 TMT) of Australian wheat for Dec shipment. They have bought around 2.2 MMT of Australian new crop wheat so far this season, along with around 3.7 MMT of US wheat. CBH Group estimated Western Australia’s 2013/14 wheat crop at 7.5 MMT versus 6.0 MMT a year ago. They have Western Australia’s 2013/14 wheat exports at 7.0 MMT out of total Australian 2013/14 wheat exports of 18.0 MMT. They see the national crop at 25-25.5 MMT versus ABARES estimate of 25.399 MMT and the USDA's 25.5 MMT. Japan bought 38,860 MT of feed wheat via a SBS tender for Nov shipment. They are also in for a further 120 TMT of feed wheat and 200 TMT of feed barley via a SBS tender for Nov shipment. Russia’s Ag Ministry said as of Aug 20th Russia has harvested 53.3 MMT of grain versus 47.7 MMT a year ago. Average yields are 2.58 MT/ha versus 1.98 MT/ha a year ago. Trade estimates for tomorrow's weekly export sales report are 450-550 TMT. Sep 13 CBOT Wheat closed at USD6.38 3/4, up 4 1/2 cents; Sep 13 KCBT Wheat closed at USD6.99 1/2, up 2 3/4 cents; Sep 13 MGEX Wheat closed at $7.28 3/4, down 6 1/4 cents.

Note that this puts Nov 13 London feed wheat at only around a historically low GBP3.00/tonne discount to Paris wheat.

I still believe that corn holds the key to where the wheat price goes going forward. Nov 13 Paris corn closed at EUR169.75/tonne, a substantial discount to wheat. New crop French corn FOB Bordeaux is offered in the market at EUR168/tonne, the equivalent of around GBP143.50/tonne.

A report on Agrimoney.com suggests that given the larger than anticipated UK carryover wheat stocks from 2012/13 (courtesy of imports of almost 3 MMT), potentially better than expected production (12.5 MMT being floated) and another year of substantial imports already on the books then domestic supply should comfortably outstrip demand in 2013/14. The article suggests UK wheat prices have a further GBP4-6/tonne downside if we end up needing to export wheat this season.

Hopes for supporting UK wheat prices are being pinned on improved demand from the UK's dithering stop/start bioethanol industry, which sadly hasn't proven to be too reliable a crutch on which to lean on up to now.

Jordan bought 100 TMT of wheat overnight for Feb/Mar shipment. The wheat was optional origin, but the seller was Ukraine-based. Their usage requirement is on the increase following a large influx of Syrian refugees. Other than that the international tender market is quiet at the moment.

French and Ukraine wheat are offered in the market at around parity, and some USD20/tonne cheaper than US wheat which should continue to boost export demand for EU and Black Sea origin material. Malaysia bought 45 TMT of Ukrainian corn for Oct shipment at a significant discount to US corn today.

Stats Canada forecast all wheat production there at 30.6 MMT, slightly higher than the 30.4 MMT that the trade was expecting and a 22 year high. They put 2013 rapeseed production at 14.7 MMT, up 11.5% on last year, but well below the 15.5 MMT that the trade anticipated.

In contrast to Western Australia's Minister for Agriculture and Food's prediction yesterday that wheat production in the state would only come in at around 6.2 MMT in 2013, CBH Group, the state's largest grain handler, forecast output at 7.5 MMT. "In the last month, we've had very good rainfall and our crop forecast has improved dramatically," they said. Australia is set to see more showers over the next 10 days.

China were said to have bought 55 TMT of Australian wheat for Dec shipment. That takes Chinese wheat purchases from Australia to around 2.2 MMT for 2013/14, with some analysts forecasting that they will buy around 4 MMT from them this year. The USDA has total Chinese wheat imports at around 9.5 MMT this season, with much of the remainder coming from the US although they have also bought smaller volumes of French and Canadian wheat.

SovEcon estimated Russia’s August grain exports at 3.1-3.2 MMT versus 2.6 MMT in July and 2.9 MMT in August 2012. Trade rumblings continue to suggest that wheat quality isn't great in Russia this year.

21/08/13 -- Rapemeal prices on the continent are sharply higher today. I'm not too sure why given that soymeal was down USD6.50 in Chicago last night.

One thing that does strike me, having only just got back off holiday, is that the nearby premium that was in the market before I went away has completely disappeared.

Aug13 was an EUR8/tonne premium to Nov13/Jan14 when I was last in the office, and today not much more than two weeks later it's an EUR8/tonne discount. That's quite a turnaround in a fortnight n'est pas?

I've not had much chance to look at the form yet (only got back from holiday on Monday - so still busy catching up).

However the first race (1.55) is a big sprint handicap, which conforms to my requirements.

The two that immediately catch the eye are ABOVE STANDARD as I won on him using the same recently mentioned high draw system here a few meetings ago. He's got trap 18 of 20 today.

The other one that also catches the eye in this race is BOGART as he was very prominent in another sprint handicap here at York at the last meeting only for his saddle to slip and his (lady) jockey fall off.

The thing that I noticed/heard about him then was that he'd just been gelded before that run. Sometimes a horse can improve significantly after being gelded (and the way he was running last time he looked like he had improved) as it takes their mind off "other things" so to speak. Because the jockey fell off he doesn't get penalised today based on the fact that he might have won last time or at least been very close. Today he has the decent male jockey Kevin Ryan on board. He's drawn 15 of 20.

The horse drawn 16 is a non runner (which puts BOGART in with the high drawn horses) so I suggest chucking these two in with SECRET ASSET (20) and TAX FREE (19) in the same multiple straight forecast bet as last time.
Four horses to finish 1st and 2nd in any order = 12 bets.

A certain Cargill gentleman well known to many of you picked up a 215/1 forecast using the same system at the last York meeting a couple of weeks ago. He still hasn't hit the buy Nogger a beer button incidentally yet either. No surprises there then!

I think I will also be doing BOGART to win as well as the forecasts.
He's currently on offer at around 8/1 as a win only bet.

There's also a 17 runner sprint handicap for the last race (4.55), I've not had chance yet to look at the form at all yet, but it could be worth doing those drawn 14,15,16 and 17 in the same multiple forecast bet just for a punt: FLYING BEAR, LES GAR GAN, TIGER TWENTY TWO and BANAADEER.

20/08/13 -- Soycomplex: It was a classic "Turnaround Tuesday" type trade today, with soybeans giving up some (but only 25% or so) of yesterday's gains. There was a bit more rainfall in today's forecast, which was enough to encourage some profit-taking following Monday's circa 40 cent higher close. "A short-wave disturbance would flatten the ridge of high pressure in the Midwest, allowing 0.50 – 1 inch showers in northern Nebraska, NW Iowa and parts of southern Wisconsin. Temperatures would be near normal over most of the grain belt," said Martell Crop Projections. However "conditions are so dry it would take heavier rain than is predicted (to eradicate moisture deficits)," they added. The first day of he Pro Farmer crop tour found better than expected pod counts in SD and OH, adding to the bearish sentiment. The SD soybean pod count came in at 1,016.7 pods per 3 foot square plot versus 584.9 pods a year ago and the 3 year average of 984.62 pods. In OH it was 1,283.6 pods versus 1,033.7 a year ago and the 3 year average of 1,162.6 pods. The Southeast Asia Soybean Export Council said US 2013/14 soybean exports to southeast Asia may fall by 5% and meal exports by 17% due to higher South American output. Taiwan bought 60 TMT of US beans for Oct shipment. A Kansas State University economist said that US soybean prices could have around a dollar upside from where we are now given an early Midwest frost. Maquaire Bank forecast US soybean yields at 42.5 bu/acre, slightly below the USDA's 42.6 bu/acre. The biggest losers in last night's crop condition report were ND down 10% in the good/excellent category versus last week, IL down 5% and MO down 5%. The best gains were for LA up 6%, MS up 4% and NC up 3%. Overall the 62% good/excellent rating that the USDA gave us last night is 5 points better than the 10 year average. For all the "drought" hype, soybeans, a desert plant at the end of the day, are ultimately in better shape than normal overall it would seem. Note that the USDA's Aug 2012 soybean yield estimate was only 36.1 bu/acre, fully 3.5 bu/acre below the final yield of 39.6 bu/acre. Sep 13 Soybeans closed at USD13.09 1/4, down 12 3/4 cents; Nov 13 Soybeans closed at USD12.90 1/2, down 12 3/4 cents; Sep 13 Soybean Meal closed at USD413.80, down USD6.50; Sep 13 Soybean Oil closed at 42.88, down 57 points.

Corn: Corn gave up around half of yesterday's 20 cent or so gains, also on a wetter outlook for the Midwest. The Pro Farmer crop tour found potential SD average corn yields of 161.75 bu/acre, hugely better than only 74.26 bu/acre a year ago and the 3 year average of 119.65 bu/acre. In OH they came up with corn yields of 171.6 bu/acre versus 110.5 bu/acre a year ago and the 3 year average of 144.1 bu/acre. For prices, this all hinges on where final yields will end up. Maquaire Bank forecast US corn yields at 155.9 bu/acre, 1.5 bu/acre more than the USDA's current estimate. The USDA's current corn yield estimate was produced based on the number of ears and ear weights. Their survey found 27,500 corn ears per acre, not far short of the 2009 record of 27,750 ears/acre. Ear weights were estimated at 0.32 pounds versus 0.27 pounds last year and 0.345 pounds in 2009. US analysts AgriVisor yesterday noted that because the US crop was unusually immature when the USDA conducted their Aug 1st survey, to help determine this year's yields they used the 5-year average weight instead. Because the 5-year average included last year's disastrous corn yield of only 123.4 bu/acre, the estimate given may therefore have been skewed to the low side, and therefore they expect that yields will ultimately end up higher than last week's 154.4 bu/acre. Incidentally though, and unlike soybeans, the USDA were calling final corn yields correctly at 123.4 bu/acre as of last August. A late planted, slow developing crop will almost certainly mean a late harvested one too. That is the biggest risk for corn right now. "Delayed development in corn is a serious worry, increasing the risk of freeze damage in the fall. United States corn 'denting' was only 11% under way August 18, among the slowest on record. Slow progress in corn is due to a very cool spring that delayed planting in the Upper Midwest. The slowest developing corn is in Iowa, the top US corn state, Minnesota the 4th biggest producer, and Wisconsin and North Dakota, affecting 30% of United States corn," said Martell Crop Projections. The same Kansas State University economist mentioned above said that US corn prices could have a half dollar downside to where we are now. Last night's crop condition report came in 3 points lower in the good/excellent category at 61%, still above the 10-year average of 58% at this time. The biggest losers were MO down 10%, CO down 7% and WI down 5%. The Argentine Ag Secretary estimated 2012/13 corn exports at 22-24 MMT. The USDA's current forecast is 23.5 MMT. Sep 13 Corn closed at USD4.83 3/4, down 9 1/2 cents; Dec 13 Corn closed at USD4.75 1/2, down 10 cents.

Wheat: Wheat, the follower. Corn was lower, so it was lower. That's about all there is to it. Volume was light and fresh news was lacking. Unlike corn and beans, at the end of the day CBOT wheat gave up 75% of last night's gains, with KCBT and MGEX wheat both losing more than they put on yesterday. Syria cancelled a tender to import 200 TMT of wheat "because the offers presented were not in accordance with our specifications," said Reuters. Jordan bought 100 TMT of optional origin wheat in their tender. Ukraine are forecasting a record grain crop and record exports. Stats Canada are due out tomorrow with their latest production estimates, with the trade expecting an all wheat crop of 30.4 MMT, the highest output since 1991 and 12% up on last year. The USDA are currently almost a million tonnes below that. The Manitoba weekly crop report said that the winter wheat harvest is displaying good yields and quality with similar from the early spring wheat, oats, and barley harvest that has only just begun. The Russian harvest is ongoing, producing 35.8 MMT of wheat so far off less than half of the planned area. Yields don't seem to be dropping as expected, in fact on the face of the numbers presented by the Ministry they are getting larger in terms of percentage comparison versus last year. The latest figures place the average Russian wheat yield up 41% versus 2012 at 2.96 MT/ha. A week ago yields were seen up 36% compared with last year. Quality does seem to be a potential problem though this year though, with Agritel reporting that the feed/milling wheat spread has doubled in the past 6-7 weeks. Kazakhstan's Ag Ministry said as of Aug 20th the country has harvested 1.368 MMT of grains off 863,300 hectares with an average yield of 1.58 Mt/ha, up 72% versus less than a tonne/ha a year ago. The August USDA WASDE report showed total new crop US wheat supplies remain abundant at 23% on a stocks to use basis in the face of strong overseas competition in the world market. US wheat is expensive relative to European and Black Sea origin material in all but to "traditional" homes, and will shortly have to compete with the very large Canadian crop that is looming menacingly on the horizon. Wheat production in Western Australia in 2013/14 could be hit by drought for a second year, and maybe only total around 6.2 MMT, according to the state's Minister for Agriculture and Food. Sep 13 CBOT Wheat closed at USD6.34 1/4, down 7 1/4 cents; Sep 13 KCBT Wheat closed at USD6.96 3/4, down 6 1/2 cents; Sep 13 MGEX Wheat closed at USD7.35, down 10 1/4 cents.

20/08/13 -- EU grains closed mixed after trading mostly lower for much of the day as US markets fell in "Turnaround Tuesday" style after posting solid gains last night. We remain heavily under the influence of a US weather market, although crops in many places are getting bigger and the overall trend is probably still downwards.

At the close Nov 13 London wheat was GBP0.45/tonne firmer at GBP154.00/tonne and with Jan 14 also up GBP0.45/tonne at GBP156.25/tonne. Nov 13 Paris wheat finished the day unchanged at EUR184.50/tonne.

APK Inform increased their forecast for Ukraine grain production from 54.1 MMT to a record 57.1 MMT, including an increase for wheat production to 21.4 MMT from the 20.5 MMT previously estimated and up 36% on output of 15.76 MMT last year. They also increased their corn crop forecast from 23.9 MMT to 26.2 MMT (also a record and up 25% on last year), with barley output rising from 7.15 MMT to 7.3 MMT (vs. 6.94 MMT in 2012).

Sources in Ukraine say that domestic grain prices at ex farm level are very poor. A lack of on farm storage means that many growers simply sell their grain for whatever they can get at harvest time in order to fund seed and fertiliser purchases for the winter planting campaign.

In the case of 3rd grade wheat and OSR they are the lowest for this time of year versus the last 4 seasons, with wheat at around USD148/tonne (equivalent of GBP94.50/tonne) versus USD210/tonne a year ago. Ukraine cash OSR prices are at around USD382/tonne (circa GBP243.50/tonne) versus USD541/tonne this time last year.

New crop corn in Ukraine is expected to fetch little more than EUR100/tonne at farm level this autumn, which is below the cost of production.

Ukraine exported 216 TMT of OSR in July, a record for that particular month, and full season exports will rise to around 2 MMT, up 45% on last year, according to local analysts ProAgro.

Kazakhstan has harvested 1.37 MMT of grain so far, with early yields averaging 1.58 MT/ha, up 72% on this time a year ago.

Russia's harvest meanwhile has advanced to 52.4 MMT off 44% of the planned area. Wheat accounts for 35.8 MMT of that off 48% of the predicted area, with average yields said to be up 41% at 2.96 MT/ha. They've also harvested 9.5 MMT of barley and 1.4 MMT of early corn.

Agritel report that the feed/milling wheat spread in Russia has doubled since the start of the 2013/14 crop year, suggesting that much of this year's crop is of lower grade than normal.
That is probably due to wet weather in the run-up to harvest and may also help explain their failure to feature in any of Egypt's recent tenders?

Nevertheless, Rusagrotrans said that Russia will export 16.3-16.5 MMT of wheat in 2013/14, up around 47-49% on last year.
Could much of that be low grade milling/feed wheat?

Agritel last night increased their 2013 French soft wheat production estimate to 37.0 MMT versus a French Ministry forecast of 36.1 MMT. That's up 4% on last year and the highest since 2004. The quality of their crop is generally now thought to be pretty good after a few early jitters.

Stats Canada are out with their latest production forecasts tomorrow. A Reuters survey puts all wheat production there at 30.4 MMT, up 12% versus 2012 and their largest crop in 22 years. Rapeseed production meanwhile is seen at a record high 15.5 MMT, up 16.5% on year ago levels.

19/08/13 -- Soycomplex: Now that last week's USDA report is a distant memory, we are back to trading the weather. The weekend was a bit drier and warmer than expected, and the forecast for the week ahead is losing some of the coolness that's been a feature lately in exchange for heat. "August rainfall is the key determinant of soybean yields. Very heavy rains optimise the yield. Rainfall has been sparse in Iowa and Illinois, the 2 leading soy states. Also very dry in August are Wisconsin, North Dakota, Missouri and Upper Minnesota placing roughly 40% of US soybeans at risk for a reduced yield. Worse conditions in soybeans are anticipated in the August 18 report, as the yield-sensitive pod filling period advances. Fifty-eight percent of soybeans were setting pods a week ago. Perhaps 75% will have reached that key stage this week," said Martell. Crop Projections. After the close the USDA cut good/excellent crop conditions by two points to 62%, although that's still double what it was this time last year. They reported that 72% of the crop was setting pods versus 81% for the 5-year average. "After weeks of coolness the weather pattern is turning hotter. The jet stream would build up a warm, stable ridge of high pressure over the heartland, ratcheting up temperatures in the central United States. Moderate temperatures, mid 80s today, would give way to upper 80s-low 90s F by Wednesday in Nebraska, Iowa, Missouri, Illinois and Wisconsin. The Tuesday evening forecast shows hot air encroaching on the Midwest from the Great Plains. The GFS model sees just light rainfall in the 5-day forecast for Midwest corn and soybeans," Martell added. Weekly soybean export inspections came in a bit better than expected at 5.294 million bushels versus 3.433 million last week. Sep 13 Soybeans closed at USD13.22, up 38 3/4 cents; Nov 13 Soybeans closed at USD13.03 1/4, up 44 cents and the first close above USD13.00 since mid-June; Sep 13 Soybean Meal closed at USD420.30, up USD11.50; Sep 13 Soybean Oil closed at 43.45, up 64 points.

Corn: As with soybeans, today was all about the weather. With funds sitting on a record large short position in CBOT corn it was always going to be a volatile August, and so it has proven to be. "Drought in the Midwest would continue to stress corn and soybeans this week with a stable ridge of high pressure aloft. The temperature forecast is much hotter. Prolonged dryness in the Midwest is taking a toll on corn and soybeans. Maximum temperatures over the weekend were 2-3 F higher than the GFS model predicted in Iowa and Illinois. When fields become extremely dry, there is less evaporative cooling which, in turn, increases surface temperatures. Corn leaves begin curling in the afternoon to conserve crop moisture. This slows down plant activity hindering kernel filling," said Martell Crop Projections. "Corn conditions are expected to move lower in Iowa, Illinois, Wisconsin, Minnesota, Indiana and North Dakota in the August 19 crop progress report today. The dry August follows on the heels of sub-par rains in July," they added. After the close the USDA cut good/excellent crop ratings by 3 percentage points from last week to 61%, more than the 1-2 point drop that the trade was anticipating, although again much higher than only 23% this time last year. They have 97% of the crop silking versus 99% normally and 52% at the dough stage versus 65% normally. Only 11% of the crop is dented against 30% normally. There's still a wide difference of opinion over final US corn yield potential with the USDA and one or two others in the 154-155 bu/acre area, many in the 156-158 bu/acre region and still some 160+ bu/acre estimates from the likes of Goldman Sachs and Deutsche Bank. The Vice President of FCStone forecast a US corn crop of just under 14 billion bushels at 13.993 billion, 1.7% above the USDA's 13.763 billion. The high profile Pro Farmer Crop Tour kicked off today, and will conclude Thursday with the results expected to be made public on Friday. Weekly corn export inspections came in at 7.061 million bushels, less than half last week's total. New crop export commitments are strong though, at 33% of the current USDA forecast for the new season ahead that's said to be the highest percentage forward sold for this time of year since 1996/97. Sep 13 Corn closed at USD4.93 1/4, up 19 1/2 cents; Dec 13 Corn closed at USD4.85 1/2, up 22 cents.

Wheat: The wheat market was happy to follow corn higher. CBOT wheat gained the most, probably due to the fact that fund money still holds a sizable short position in that. Funds were estimated as buying around a net 2,000 CBOT wheat contracts on the day. Weekly export inspections added some support, coming in at a strong 33.787 million bushels versus 24.345 million the previous week. That takes the 2013/14 marketing year to date total to 274.46 million bushels, versus 213.97 million a year ago. The US winter wheat harvest is winding down at 96% done, ahead of the 5-year average of 94%. Spring wheat crop conditions saw a 2 point switch from good into excellent, although the two combined were unchanged from a week ago at 66%. Spring wheat harvesting was placed at 18% complete versus 38% normally at this time. With the French wheat harvest wrapping up, Agritel estimated the crop there at a 9-year high of 37.0 MMT today, up 4 percent versus last year. The Ukraine Ministry upped their 2013/14 grain export estimate from 28 MMT to a new record 30 MMT, close to APK Inform's estimate of 30.4 MMT last week. They have the early grain harvest (excluding corn) at around 32.5 MMT in bunker weight, or somewhere in the region of 31.0 MMT in clean weight. Russian analysts IKAR trimmed their forecast for grain production there this season from 89.7 MMT to 89.2 MMT due to a lower than previously forecast barley crop. The Russian Ministry said that the 2013 barley harvest currently stands at 9.0 MMT, with average yields at 2.19 MT/ha, not hugely better than 1.90 MT/ha a year ago. IKAR left their forecast for Russian wheat production unchanged at 51.9 MMT versus 54.0 MMT from the USDA. With the Russian wheat harvest approaching the halfway mark, domestic prices are steady on strong export demand, according to SovEcon. In a complete reversal of Morocco's fortunes, where grain output has almost doubled this year, Tunisia's crop is seen down 47% on dry weather, from 2.61 MMT to 1.37 MMT. That means that 2013/14 grain imports could rise 30% from last season to 3.57 MMT and up 23% on the 5-year average, according to the FAO. Sep 13 CBOT Wheat closed at USD6.41 1/2, up 10 1/2 cents; Sep 13 KCBT Wheat closed at USD7.03 1/4, up 5 cents; Sep 13 MGEX Wheat closed at USD7.45 1/4, up 8 cents.

19/08/13 -- EU grains closed higher (with the exception of malting barley) on bargain hunting, short covering, consolidation, call it what you will. It's probably far too early though to say that a bottom has been found and that we've turned the corner just yet.

London wheat closed with Nov 13 GBP0.95/tonne higher at GBP153.55/tonne, Jan 14 was also GBP0.95/tonne firmer at GBP155.80/tonne and Nov 13 Paris wheat rose EUR0.75/tonne to close at EUR184.50/tonne.

The Russian grain harvest now stands at 50.8 MMT off 42% of the planned area, with average yields of 2.63 MT/ha, up 31% versus 2.01 MT/ha a year ago. That's not quite a "return to normal" of the average yield of around 2.81 MT/ha as of mid-August 2011 however. The wheat harvest so far accounts for 35.2 MT/ha of that, off 46.2% of the planned area, with average yields of 3.00 MT/ha representing a near 39% increase on a year ago at this time.

There are still a few rumblings that final production and yields may not ultimately be as high as the Ministry currently project, although these fears have failed to manifest themselves so far - if we accept the above numbers as being genuine.

The Ministry say that Russia exported 1.45 MMT of grains in the Aug 1-15 period (including over 1.2 MMT of wheat), bringing the cumulative 2013/14 marketing year to date total to almost 4 MMT, nearly 33% up on a year previously.

It's been warm and dry in Ukraine for the past month, allowing farmers to wrap up the early grain harvest in a timely manner. The Ukraine Weather Centre say that these conditions will prevail until at least the end of the week, which may not ultimately prove to be quite so beneficial for corn. Nevertheless a record 2013 Ukraine corn crop is widely expected, and Agritel today said the it might be "difficult or impossible" for growers there to make more than EUR100/tonne ex farm for corn this year.

If so, that could still put further downwards pressure on wheat prices once the 2013 Ukraine corn harvest begins.

The US grain market also had a consolidation sort of a day today, supporting EU prices, after the weekend weather there finished up drier than expected. As well as some still talking about an early frost threat, we now also have others talking of a much hotter forecast for later in the week also causing potential damage to yields.

It's difficult to see how we can have a frost and a heat threat all at the same time, but with funds holding a record short position in corn anything that spooks them either way leaves that market vulnerable to a correction to the upside until we have some more clarity on final yield potential across the pond.

On the demand side of the coin, escalating unrest again in Egypt appears to be responsible for keeping state buyer GASC out of the market last week, for the first week in six. China appear to have retreated into their shell for now, although Jordan has a 100,000 MT wheat tender pending. European wheat is at least finding good interest however, with soft wheat export licenses so far double those of a year ago, but this is before competing new crop corn also comes onto the market.

In other news, Agrimoney reported that "the era of rising European Union production of biofuels based on food crops is over," according to USDA staff here. An apparent change of heart by the European Commission, who are now proposing to cap the percentage of biofuels used from food sources to 5% as opposed to the previous limit of 10%, is behind the re-evaluation.

Europe's largest biodiesel maker, Diester Industrie, said recently that it was to close two French plants with a combined capacity of almost that of Ensus because of the move.

Separately, new stats out of Germany reveal that whilst gasoline usage was down 3.3% year on year in the first half of 2013, bioethanol usage was down more than twice that level at -6.9%.

18/08/13 -- Wheat is a follower of corn, I'm convinced of that. They key to where wheat prices are headed is therefore where are corn prices going?

The answer to that seems to fairly and squarely depend on whether you think that US corn yields will be higher or lower than the USDA's Monday forecast of 154.4 bu/acre. Some trade estimates are a bit lower, most are higher, with some considerably so.

The crucial factor that we don't know the answer to is what's the Midwest weather going to do between now and harvest time?

We do know is that we have a late planted crop that has matured slowly, therefore harvesting of corn will likely be late, leaving a larger than normal percentage of the crop vulnerable to an early frost. A cooler than normal summer doesn't necessarily mean an early start to winter though.

This one really is a "do I put it all on red or black?" type scenario.

As far as the US supply and demand side of the coin is concerned, we do know that corn sales are ahead of normal for this time of year (at 33% versus 22%). Wheat sales are also ahead of normal, although the US is currently being priced out into North Africa and the Middle East by European and Black Sea origin material.

They do however have "new" buying interest from Brazil and China, and are at a geographical advantage to service this extra demand.

Wheat's problem is rebuilding and holding onto a hefty premium over corn, and that's why I think that the latter holds the key to the fate of the former.

Whether the latest USDA corn production estimate of 13.763 billion bushels is too low (or even too high) or not, it is almost a given that the 2013 US corn crop will be a record high. It is in fact more than 650 million bushels higher than the existing record crop of 2009.

For 2013/13 US corn ending stocks of 1.837 billion bushels meanwhile, even if below pre-report trade estimates, still represent a massive increase (over 1.1 billion bushels massive) on 2012/13. World 2013/14 corn ending stocks are forecast at a 13 year high too.The roll of the dice seems to favour further price depreciation for corn, unless you are keen on the early frost theory. We also have the threat to demand for US corn to come from a large rebound in corn production in Europe and a record crop from Ukraine just around the corner. Further down the line we can expect South American growers to plant more soybeans and less corn later this year. This might ultimately help rebalance the soya:corn price difference if and when it happens.Meanwhile though, expect choppy trade in corn to continue with each fresh daily weather forecast. The size of the record large fund short position obviously does leave the market vulnerable to a corrective bounce, but my money would be on corn (and therefore wheat) prices being lower than they are currently come October time.

18/08/13 -- Here I am, not quite "sitting at the dock of the bay" but sat in the bar at the hotel overlooking the pool with the "dock" or jetty just a short hop away. I'm enjoying a beer (obviously) as there isn't much else to do on the day that you are leaving is there? It's currently 4 hours until we catch the speedboat to the airport, so I'd better try and pace myself (yeah, as if).

So what else is there for it, in order to not drink beer quite so swiftly, it's time to cast an eye over the week's proceedings and ponder what the markets might do going forward.

I've unearthed one or two interesting "facts" which I'd like to impart.

First off, looking at Monday's USDA report, one of the main surprises slung our way there was the huge drop in US soybean ending stocks for 2013/14. You will recall that these were slashed from 295 million bushels in July to only 220 million this month.

When you dig slightly deeper you will note that production was reduced by 165 million bushels, from 3.42 million to 3.255 million. That is "only" 240 million bushels above what was considered to be an absolute disaster last year.

Had the USDA not "cooked the books" on the demand side and simply taken that 165 million straight off the bottom line then we'd have been presented with 2013/14 ending stocks of only 130 million bushels. That's barely higher that the 2012/12 "line in the sand" of 125 million that they've stood by for months now - a level regarded as bordering on "critically low" and that seemingly warranted US soybean prices being far higher than they are currently.

Whilst the USDA was happily balancing the books by lowering US export potential, it was about to release Thursday's weekly export sales report revealing that the recent price slump had encouraged sales of close to 1.9 MMT - the largest weekly total in around 18 months.

As of last Monday, the US had already sold 41% of the USDA's projected target for 2013/14, versus 27% normally. Following Thursday's numbers we now have a situation where cumulative sales for 2013/14 already stand at 47.5% of the USDA forecast for the season versus a 5 year average of only 30%. It would therefore I think seem to be a fair conclusion to draw at this stage that the USDA's 2013/14 soybean export target is too low and needs to be revised higher at some point. It would also seem that 2013/14 ending stocks are possibly still too high at 220 million, and could in fact end up significantly lower than that, especially if we factor in that old crop carry-in is probably NOT going to be 125 million bushels, but will in fact be lower than that.Potentially then, that indicates that as far as US soybean supply and demand and stocks levels are concerned, 2013/14 might end up being just as tight as 2012/13 was.With the latest news that 1.6 million acres of intended US soybean area never got planted this year, and the possibility of an early frost cutting yields further this year is a scary one.I'm fully aware that the South American cavalry are supposed to be coming again, but they are at least 5-6 months away yet. What happens meanwhile IF we do get a frost scare and/or funds decide to close out their short position, or even start to rebuild their normal longs?

About Me

Worked in agriculture for over 30 years as a shipper, merchant, trader & broker, but still hasn't got the faintest idea what he's talking about.
Likes beer apparently, so why not do the decent thing an hit the donate button you tight bastard?
He can also provide content for your website like market reports and commodity prices. And if you haven't got a website he can design one for you. In short, the man's a bloody genius.

Disclaimer

All comments on this website are the sole opinion of the author, and are not capable of nor intended to constitute professional advice. Neither can Nogger give any guarantee for the accuracy of any of the information or data contained within this site.

The guy is clearly deranged and you should almost certainly ignore everything that he says.